ECB Says Cryptocurrencies Now Too Small To Pose Threat

The president of the European Central Bank, Mario Draghi, said cryptocurrencies in the Eurozone have had a limited impact on the economy.

According to a news report in Reuters, citing comments Draghi made to the European Parliament, he said that despite concerns, digital currencies do not pose a threat to the European Central Bank’s control over the money supply. “We think that all this is pretty limited,” he said. “So, it’s not yet something that could constitute a risk for central banks.”

Draghi’s comments come as bitcoin, the leading digital currency, surpassed $8,000 over the weekend, setting a new all-time high that sharply contrasted the start of this year, when bitcoin was trading at around $1,000.

Last weekend, the value of the coins fell to roughly $5,500 after an upgrade to the network called SegWit2X, which would have caused a hard fork, was canceled. The idea behind the update was to increase the speed of bitcoin transactions, in the process creating a new bitcoin version that would have been spun off. The cancellation of that update prompted a steep sell-off in the digital currency, which didn’t last.

At the same time that the hard fork failed to occur, bitcoin has been getting a lot of positive support to quell the reaction from the clampdown by regulators in China and South Korea. Earlier in the year, China banned bitcoin exchanges and initial coin offerings, and South Korea followed suit with its own blocking of ICOs.

The U.S., U.K., Russia and a host of other countries have warned about the risks associated with this type of currency, which is largely unregulated. But cryptocurrency also has its supporters that include the likes of Japan and CME. Japan has been embracing cryptocurrency, putting rules on the books to allow consumers to pay for goods and services with bitcoin. It also requires cryptocurrency exchanges to be licensed and face annual audits, giving the currency official approval. Meanwhile, CME, the world’s largest futures exchange operator, gave bitcoin more legitimacy, recently announcing it will launch cryptocurrency futures by the end of the year.